Boomers are buying the most homes

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Charted: The average U.S. tariff rate since 1890 link

• In 2025, the average U.S. tariff rate surged to 14.5%, the highest level since 1938. That’s up from just 2.5% in 2024 and marks a dramatic policy shift.

• Tariffs on China now reach 125%, while Chinese tariffs on U.S. goods stand at 84%. These moves are projected to cut imports by 30% and raise $206.6 billion in federal revenue in 2025.

• Historically, U.S. tariffs peaked at 29.6% under the McKinley Tariff of 1890 and again during the Great Depression at 19.8%. Today’s spike echoes those protectionist eras and is already triggering market volatility.

Boomers are buying the most homes (again) link

• Baby boomers made up 42% of all U.S. homebuyers between July 2023 and July 2024, overtaking millennials who dropped to 29%. This marks only the second time since 2013 that boomers have led in annual home purchases.

• The share of first-time buyers fell to a historic low of 24%, down from 32% the year prior. High prices, limited inventory, and down payment struggles are locking millennials out of the market.

• Boomers often paid in cash—51% of older boomers and 39% of younger ones—while over 90% of buyers under 45 relied on loans or family help. Multigenerational home purchases also rose to 17%, up from 14% last year.

Cap rate compression continues for industrial as interest rates normalize link

• The average industrial cap rate dropped to 6.29%, down 13 basis points from a year ago, with Class A assets commanding the lowest cap rates between 4.5% and 6.5%. Markets like Chicago, Houston, Seattle, Raleigh, and Atlanta are driving demand.

• Cap rates for Class B and C properties are wider, with spreads of up to 198 basis points between top and bottom tiers. Investors are chasing higher yields in urban areas with strong workforce access and upside on under-market leases.

• Interest rate normalization has stabilized Class A cap rates, while buyer and seller expectations are becoming more aligned. With rate cuts expected later this year, investors anticipate further compression in core markets.

Aging in place, high equity is impacting moving activity link

• Many baby boomers are choosing to stay put due to low mortgage rates, emotional ties to their homes, and fears of capital gains taxes. In places like Laurel, Mississippi, the cultural connection to homes makes moving less attractive.

• Despite this trend, baby boomers have recently overtaken millennials as the top homebuyer group, often winning bids with cash offers. Their financial advantage comes from equity built over decades and fewer financing constraints.

• Some lenders are pushing reverse mortgage options like HECM for Purchase to help older homeowners downsize or relocate, but uptake remains low. Reverse mortgage industry leaders see potential, but H4P loans still struggle to gain traction.

Tennessee real estate market forecast for 2025 link

• Tennessee's home prices are expected to rise 4–6% in 2025, with Nashville topping $550K and Chattanooga nearing $350K in some neighborhoods. Memphis, Knoxville, and Chattanooga continue to see steady 5–7% annual gains, driven by job growth and affordability.

• Inventory remains tight in cities like Nashville and Knoxville, but new permits and listings are expected to raise statewide supply by 8–10%. Builders in Memphis and Chattanooga are also boosting affordable housing projects to meet demand.

• Mortgage rates could dip to the low 6% range from the 7.5% average in 2024, potentially improving buyer purchasing power by 10–12%. This could help ease affordability concerns, especially in competitive markets like Nashville.

Adaptive

Adaptive is an AI-powered platform for real estate developers and investors that streamlines site selection, zoning analysis, and development feasibility through data-driven insights and automation.

Blackstone snaps up 6 MSF industrial portfolio for $718M link

• Blackstone’s Core-plus funds are acquiring a 95% stake in a 6 million-square-foot industrial portfolio developed by Crow Holdings, concentrated in Dallas and Houston. The deal is valued at $718 million and will close next quarter.

• The firm is betting on logistics hubs as vacancy stays low and new construction has dropped over 80% since its 2022 peak. Blackstone's industrial portfolio in North America now exceeds $90 billion in value.

• Earlier this year, Blackstone sold a 2.1 million-square-foot, 21-building industrial portfolio across Dallas, Philadelphia, Cincinnati, and Las Vegas for $293 million. It also raised $8 billion for its latest real estate debt fund, focusing on global lending and structured solutions.

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Vidit

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